Education Industry Merger & Acquisition Trends

Berkery Noyes full report

Financial sponsors accounted for 30 percent of volume and 63 percent of value in 2012, compared to 25 percent of volume and 51 percent of value in 2011. Higher-Ed Media and Tech was the segment with the most notable volume increase, rising 59 percent since 2011. One of the segment’s largest deals over the course of 2012 was John Wiley & Sons’ acquisition of Deltak edu for $220 million.

2012 KEY HIGHLIGHTS

• Apollo Global Management, LLC’s announced acquisition of
McGraw-Hill Education was the largest industry transaction in
2012, with an acquisition price of $2.62 billion.
• With six transactions, Pearson was the industry’s most active
acquirer in 2012. Pearson’s largest transaction during the year
was its acquisition of EmbanetCompass for $650 million.
• The combined Professional Training Institutions and Technology
segments accounted for 31 percent of the overall industry’s
transaction volume. In addition, strategic buyers represented
71 percent of this sector’s deal flow.
• There were 74 financially sponsored transactions with an
aggregate value of $4.33 billion, representing 30 percent of
the total volume and 63 percent of the total value, respectively.

2012 KEY TRENDS

• Total transaction volume in 2012 stayed nearly the same compared
to 2011, from 251 to 250.
• Total transaction value in 2012 decreased by 44 percent over 2011,
from $11.93 billion to $6.66 billion.
• The median revenue multiple between 2011 and 2012 remained
constant at 1.6x. The median EBITDA multiple declined from
12.0x in 2011 to 10.3x in 2012.

M&A MARKET OVERVIEW

Berkery Noyes tracked 729 transactions between 2010 and 2012,
of which 243 disclosed fi nancial terms, and calculated the aggregate
transaction value to be $24.43 billion. Based on known transaction
values, we project values of 486 undisclosed transactions to be
$2.01 billion, totaling $26.44 billion worth of transactions tracked
over the past three years.

Disclosed median enterprise value multiples for all segments
combined in this report during the last 36 months were 1.8x
revenue and 10.4x EBITDA.

Based on volume, the most active market segment that Berkery
Noyes tracked between 2010 and 2012 was K-12 Media and Tech
with 145 transactions.